Your client ABC is employed as a Telecommunications manager with Opstar a national telecommunications company which build mobile phone towers across all capital cities. The taxpayer usually works in the Elizabeth St office in the Sydney CBD but is required to travel to various work sites on a regular basis. Sometimes the taxpayer will spend the whole day in the Elizabeth St office, but may be required to travel to multiple other locations in one day. The taxpayer's main work activities involve face-to-face meetings with customers and on site engineers, analysing mobile phone data , and managing ongoing mobile phone tower maintenance and build

The employer provides each employee with a basic set of uniform items consisting of 2 x pants/skirts, 2 x shirts, 1 tie/scarf, and 1 x blazer. Employees can purchase additional uniform items from the employer at their discretion. All uniform items clearly display the Opstar logo. Wearing of the uniform is not compulsory for all frontline employees, however the design is registered with Aus Industry. Each employee is responsible for the laundering or dry cleaning of their uniform.

The payment summary from the employer, Opstar Ltd ABN 98 767 522, shows the following:

Gross Salary (includes tax withheld below) - $155,000

Transport/Travel Allowance - $ 4,000*

Entertainment Allowance - $ 2,000*

Tax Withheld - $45,000

Reportable Fringe benefits -$ 8,000*

OTHER INCOME:

Interest earned on bank accounts. All accounts are held in the taxpayer's name, apart from the joint account, which is held jointly with the taxpayer's spouse:

Macquarie Bank Joint Account number 008443667 $ 250

Unity term deposit Account number 004 6600 214$300

The taxpayer and their spouse hold a small joint share portfolio. During the year they received the following dividends:

DRT shares fully franked $7,000

IRO 70% franked $1200

JAF shares unfranked $700

In November 2022, the taxpayer won $6,000 on the lottery

In May 2023, the taxpayer received compensation of $25,000 for medical costs incurred in a traffic accident

PROPERTY:

Land in Port Macquarie

The taxpayer purchased this land for $180,000 in February 2019. Stamp Duty and legal fees on purchase was $19,000. At the time of the purchase the taxpayer intended to build a house on the land, but this never eventuated the taxpayer also incurred $12,000 on Council rates and $5,000 on maintenance during the period of ownership. The property was sold under a contract entered on 14 April 2023 for $300,000. Agent's commission and legal fees on sale amounted to$ 5,500

The land was funded by a loan from BankEast. The taxpayer paid $23800, interest over the life of the loan on the land

Property in Hawks Nest NSW.

The second property is a house located at 15 Stevens Place Hawks Nest NSW. The tax payer paid $500,000 on 4 February 2020. They paid $1,500 for legal fees and $11,440 for stamp duty at the time of purchase. The property is funded by a loan from GNI Bank. Interest of $22,000 was paid during the 2023 tax year. The taxpayer incurred borrowing costs of $1,600 on this loan in February 2020

In February 2019 the taxpayer engaged a quantity surveyor who advised that the building was constructed in 2005 and the construction cost for the house owned by the taxpayer was estimated to be $125,000. In August 2022 the tenants moved out of the property, and it was vacant for a period of 4 weeks, even though the agent had advertised for tenants for 2 weeks prior to the old tenants vacating and continued to advertise until suitable tenants were found. The taxpayer decided to take advantage of the vacancy to replace the kitchen, curtains and the major appliances and paint the interior of the property as all had deteriorated over the period of ownership, and particularly since the property had been rented. The new kitchen cabinets cost $18,000, electric stove $5,500 and dishwasher $1,100. Theinternalpaintingcost$8,800. The taxpayer travelled to Hawksnest to oversee the renovations. Fares and accommodation for the trip cost $2,200. The renovations were finished just in time for the new tenants to move in on November 1 2022.

The annual statement from the agent who manages the property appears below (HINT: The Letting fee, Management fee and Postage & Petties are fees charged by the agent & the Rental Bond Board holds residential bonds in trust for release to either the tenant or the landlord at the end of the tenancy period, depending on the condition of the property at that time).

Hawks Nest Property Management Specialists
6/40 Prestons Road NSW, 2450
Property Address:	15 Stevens Place, Hawks nest
Annual Rental Statement	1 July 2022 - 30 June 2023
INCOME
Rental Income Received	$ 24,500.00
Water Rates Reimbursed by tenant	$ 323.00
TOTAL	$ 24,823.00
OUTGOINGS
Advertising	$ 425.00
Council Rates	$ 3,100.00
Cleaning	$ 275.00
Insurance	$ 1,600.00
Mowing & Garden Maintenance	$ 850.00
Pest control	$ 560.00
Repairs:
Replace Hot Water System thermostat	$ 165.00
Water Rates	$ 805.00
Retained By Agent
Letting Fees	$ 900.00
Management Fees	$ 1,402.00
Postage & Petties	$ 90.00
TOTAL	$ 10,172.00
NET PAID TO OWNER	$ 14,651.00

ADDITIONAL INFORMATION PROVIDED BY THE TAXPAYER:

The taxpayer is a member of the Australian telecommunications association and paid annual membership fees $900

Reportable Fringe benefits of $6,000 arose from the provision of a motor vehicle for private purposes

The employer was paid an Entertainment Allowance of $2,000. This is paid to employees who must entertain customers. The taxpayer spent this allowance on coffees and lunches with the customers.

The taxpayer incurred $160 on dry-cleaning work jackets. These jackets do not have the Opstar logo

All other uniform items are 'wash and wear', and they are laundered once each week with other clothing. He/she also purchased protective overalls (which have the Opstar logo) at $120 and a pair of leather dress shoes for $255.

The taxpayer is often required to travel to various properties to meet with customers and attend meetings. On the days he/she works in the George Street branch he/she uses public transport to travel to and from work. When required to work at alternative locations, often located at various locations in outer Sydney suburbs, they use their private motor vehicle ,a Toyota (registration BB-CC-XY). They have not kept a full logbook, but diary records maintained to claim a travel allowance from their employer show that they travelled 6,300 kms for work purposes during the period from 1 July to 31 March. This includes travel from home to alternative work location.

The tax payer donated $200 to the RedCross.

The taxpayer incurred $480 on a speeding fine and $80 on parking fees whilst travelling for work.

The taxpayer donated $20 to red nose day and received a red nose.

The taxpayer made an additional superannuation contribution of $15,000 to their complying superannuation fund. The Taxpayer has given notice in the approved form to the superannuation fund.

The taxpayer incurred $1,600 on a Life insurance premium and $1,800 on income protection insurance.

The taxpayer took four weeks of annual leave during year. The trip to Hawks Nest to oversee the rental property renovations was taken during the time they were on leave.

The taxpayer's date of birth is 14 May 1988

The taxpayer has a Master of electrical engineering degree and an outstanding HELP debt of $8,000 on June 30, 2023

The taxpayer's spouse was born on 2 February 1989. The spouse works as a tax accountant and earns taxable Income from this occupation of $110,000 during the 2023 financial year. They cannot claim any deductions. They have not earned any interest or dividend income other than from joint investments mentioned above.

The taxpayer and their spouse have Private Health 'Extras' Insurance with BUPA, Policy Number BP754988, but it does not include private hospital cover. They do not have any children.

REQUIRED THE CALCULATION METHOD AND MENTION THE SECTION NUMBER:

Work Related Income

Other Income

CGT Calculation

Rental Income

Total Assessable income

Deductions

Family Income for Surcharge Purposes

Repayment income

Tax Payable

Answer rating: 100% (QA)

Work Related Income 1 Gross Salary 155000 2 TransportTravel Allowance 4000 3 Entertainment Allowance 2000 4 Reportable Fringe benefits 8000 5 Total Wo... View the full answer